Asiacell shares sold on Iraq bourse in major float

05 Feb 2013

Asiacell, the mobile phone company of Iraq, sold a 25 % stake to investors Sunday, raising close to $ 1.3 billion in one of the region’s biggest share offers in years.
The floatation on the Iraq Stock Exchange was seen as a test of investor confidence in the country.
It could reassure global investors, many of whom remain wary of the risky Iraqi market, influenced by continued sectarian violence and political deadlock.
In the latest violence Sunday, a suicide car bomber joined by other suicide attackers on foot assaulted a provincial police headquarters in the disputed northern Iraqi city of Kirkuk, killing at least 15 people and wounding 90 others, officials stated.
Asiacell had proposed for a quarter of its shares, or 67.5 billion, as part of licensing requirements. The initial share price was set at 22 Iraqi dinars, or just under 2 cents.
With Asiacell’s share offer, the market capitalization of the ISX nearly doubled to approximately $ 9 billion up from $ 4.7 billion, said Taha al-Rubaye, head of the stock exchange.
Foreign investors bought about two-thirds of the stock, said Shwan Taha, whose brokerage firm, Rabee Securities, organized the sale.
Daily dealing of Asiacell stock began on Monday.
Al-Rubaye said it's the first stock float on the ISX, which was set up in 2004, a year after a U.S.-led invasion toppled Iraqi dictator Saddam Hussein. Al-Rubaye said he believes it's also the largest IPO in the Middle East in nearly five years.
The government-controlled oil sector dominates the Iraqi economy, dwarfing a small private sector and capital market. Al-Rubaye said he hopes the Asiacell offer is a sign of change.
A New York-based fund manager, Geoffrey Batt, who has been investing on the Baghdad exchange since the year 2008, said that Asiacell is demonstrable evidence that Iraq does in fact have a feasible capital market.
He also said that it points out that this is a market capable of attracting important investment form local and foreign sources.
Asiacell is one of the three major Iraqi telecom companies, along with Zain Iraq, part of Kuwait’s Zain, and Korek, an affiliate of France Telecom. The Gulf state of Qatar’s government-backed Qatar Telecom has a bulk stake in Asiacell.
The three companies were needed to list shares on the stock exchange as a condition of their 15-year operating licenses, which cost $ 1.25 billion when they were acquired in the year 2007.
All of the three companies missed the deadline in August of 2011 to offer shares to the public.
Source: [Charlotte Observer]